CASPER, Wyo. — Rocky Mountain Power and two intervening consumer groups have reached a rare agreement that knocks down about 30% of the utility’s original proposed rate increase across customer classes.
Representatives for the state Office of Consumer Advocate and Wyoming Industrial Energy Consumer told the Wyoming Public Services Commission at a daylong hearing on Tuesday that they felt the compromise was “just and reasonable.” The commission will reconvene on Wednesday, but it is unclear when a decision will be made.
The new rates would become effective June 1, 2025.
Rocky Mountain Power, a six-state network under parent company PacifiCorp, initially said in August it needed to recover about $123.5 million to square with the real costs of fuel, operation and maintenance, as well as capital investments like transmission lines and the Rock Creek II wind facility in Albany County, projected to come online this September.
The company also cites the exploding price of wildfire liability insurance. A company official told Oil City News last summer those premiums have increased about 1,800% over the last few years due to costly litigation from catastrophic fires.
After negotiations, the consumer groups and Rocky Mountain Power have agreed on a plan to recoup $85.5 million, according to the joint stipulation and settlement agreement.
For most residential customers, the overall increase would be about 14.5%, rather than the 17.5% in the original proposal. It includes a base rate increase of $20 to $23. The U.S. Energy Information Administration estimates that the typical Wyoming household uses about 894 kilowatt-hours of energy per month. For them, monthly power bills would increase from about $118 to $136 per month.
The largest commercial power users would also be subject to new terms for excess usage and line extensions.
The proposal comes after a contested rate increase of an average 8.3% last July, which is still under appeal with the commission.
Natrona County state representative Tony Locke testified against the increase on Tuesday. He and fellow representative Bill Allemand say Wyoming residents can ill-afford another price increase of any kind after dealing with inflation and property taxes.
There is also a fundamental disagreement with PacificCorp’s emphasis on renewables and the notion that the new transmission projects will primarily serve out-of-state demands.
RMP officials have said that delivering power requires economies of scale and that Wyoming ultimately benefits from the interstate system. They say that a mixed energy portfolio gives the system flexibility and reliability.
Many of the negotiations relate to isolating and allocating Wyoming’s specific share of costs and liability within the multi-state system. The stipulated agreement states that the parties but don’t agree to any particular methodology for making those determinations, but will continue to discuss them.
Industry witnesses before the commission Tuesday were asked about the potential impact of the Wyoming law passed last week requiring electrical utilities to submit wildfire risk management plans to the state public services commission.
If the commission approves the utility’s plan to manage vegetation, identify risk, “harden” electrified equipment against extreme conditions and de-energize parts of the grid during an emergency, the utility will carry a presumption of non-negligence in civil litigation.
Frank Graves, a consultant in regulatory and financial economics, said that utilities in Western states are experiencing more frequent and extreme wildfires, many with direct links to global warming.
In 2023, a federal judge found PacifiCorp liable for the Labor Day fires in Oregon in 2020 that killed nine and destroyed over 5,000 homes, saying the company failed to de-energize power lines during an extreme weather event.
“That verdict was very challenging news to receive for any and all involved,” Mariya Coleman told the commission on Tuesday. Coleman, vice president of corporate insurance and claims for PacifiCorp’s parent company, said that those payouts are still under litigation, but the judgement has sent ripple effects across the industry. She said insurers are still trying to quantify the risk, as even the least likely of events could result in catastrophe.
Wyoming’s law should help insurers feel more comfortable setting higher liability limits for RMP, but Coleman said she is not aware of any way to yet gauge the direct effect.
Allen Berreth, vice president of transmission and distribution operations for PacifiCorp, told the commission on Tuesday there is already a robust wildfire risk plan developed for Wyoming that should satisfy the new law and the commission. It involves a combination of risk assessment tools including on-the-ground inspections, drones and satellite imagery.
